The correct answer is competition among consumers increases prices.
Does competition cause price increases?
Economic intuition suggests that increased competition generates lower prices. However, recent theoretical work shows that a monopolist may charge a lower price than a firm facing a competitor selling a differentiated product.
How does competition among buyers affect prices?
Competition among buyers increases prices and allocates goods and services to those people who are willing and able to pay the most for them. Competition among sellers results in lower costs and prices, higher product quality, and better customer service.
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